Ahhh...Real Estate

OK - Well, it has been a long, long time since I have written in my blog due to a number of very special and important events...so I will go through them over the next number of posts. 

I am starting with Real Estate and the value of a "contract".  On Sunday, November 29th, we received 2 offers for our house we are selling.  One just below asking price, which was the first offer, and a second one just above asking price.  Close dates were very similar and conditions were identical.  Obviously we took the higher offer from the second person that had brought the offer forward on Sunday evening.  Everything seemed fine.  2 simple conditions, home inspection and financing, and we are home free.  He was up front early on (through is agent) that financing would not be an issue.

On Tuesday the home inspection was completed and 1 minor issue was stated.  We agreed to have it fixed to the satisfaction of the buyer and agreed through email that the condition would be met.  Second was the financing.  Normally, when financing is done through an institution, documentation and disclosure is an important part of the process.  If anyone has dealt with banks in the past, and most have, banks are notorious for over-documenting processes.  This is normally a pain in the ass, but for this particular instance, it may be very important, as you will hear shortly.

On Thursday, our buyer's agent emails my agent to say that the deal may not go through, not because of the home inspection, but because of financing.  We are extremely frustrated at this point because he was clear early on that financing would most likely not be an issue.  When the agent emailed about the financing, my agent rightfully asked for documentation surrounding the denial of financing.  The bank would have a paper trail showing that this buyer had been approved or been denied financing, and that we would require that piece of paper to sign a mutual release on the contract.  It seemed pretty simple because if he had gotten financing, we would have required documentation proving that he did get financing.

For the next few days, we heard nothing from his agent.  No documentation.  No responses.  No professionalism.  So, you wonder who this agent is?  http://www.brianbalmer.com/  Take a look at his website.  This is not meant to be a slander, but a statement to say that you must follow through on what you say and act in a professional manner to all parties involved.  If your client was truly denied financing, prove it, for whatever reason.  This agent, Brian Balmer, is not providing my agent with the information we have asked.  Simple request.

So, we have decided to push forward on our threat of legal action.  This agent has until 5pm today to provide us with information regarding the client's financing with regards to the contract, or we will move forward with legal action.  I truly hope is does not get to this, but all the facts will be laid out if it does. 

What is the frustration with this?  It looks like the contract that this buyer signed to purchase our house is not worth the paper it's printed on.  It was a legal document with conditions attached.  The buyer has not proven either way whether these conditions have been met.  What is the purpose of having an agent and sign these contracts if people can just walk away because they feel like they don't want to provide proof?

My agent has been wonderful and forthcoming in this entire process.  Miranda O'Sullivan has been professional and curtious to all parties, and I would recommend her to any and all who ask.  Once again, this is not meant to be an advertisement or a ridicule of any agents, but really about the process and the ability for someone to walk away unscathed from a contract. 

Please post any comments or stories you have about real estate contract issues.  I would love to hear them.  I am sure I am not alone.

Thanks for reading.

Craig

Life as a landlord

I have been a small time landlord for about 5 years now.  We have had tenants in our basement, tenants in a house near St. Mary's hospital, and tenants in our 3rd house for just over 1 year.  All of these experiences have been very positive.

At the end of July, our tenants in our rental house near the hospital decided to purchase a house.  They had been great tenants for almost 3 years.  They were very good to have and we were going to miss them.  Instead of trying to rent it out again, we decided that selling would be the best option for us.  As we found out, part of being a landlord is to sell your properties.

The selling process has been very interesting.  We tried to sell the house "as-is" for the first 2 months.  The renters moved out, we cleaned up and tried to sell it with the original kitchen, didn't fix many of the little issues and we decided not to paint.  We had over 70 people through the house and not one offer.  Our real estate agent, Miranda, is very good and experienced and she thought we would have no issues selling the property.  Unfortunately we found out something very interesting about first time home buyers in K-W right now.  They won't lift a hammer when they buy a house.  They want a house where they can move right in, most likely just like their parents house they moved out of, and they want it all for less than $250,000.  I think this is a consequence of the baby boomer generation that did not do much work on their own, therefore their children have no idea how to do the work around the house.

Understanding this, we decide that we would make the necessary investment into the house to get it sold.  Thankfully my brother in law and father in law are very handy and love doing the work.  I like the work, but not to the extent of these two, and I don't have the skills.

We have spent the past 4 weeks ripping out the old, original kitchen, painting, cleaning, and installing new kitchen cabinets.  We are redoing almost every room in the house.  It has been a big job, and we most likely have 3 more weeks to go, but we are progressing.

For those people who have older houses that you are trying sell, a fixer-upper is not valuable.  Spend $6000 -$7000 to improve the kitchen, then sell it for $10,000 more.  New home buyers are willing to spend some money, but they are not willing to do the work.

More updates later. 

Thanks for reading.